Strategies and Tools to Effectively
Manage FDR Audit and Oversight
CBI Conference
November 12-13, 2015
Erin Costell, Navigant Consulting
D I S P U T E S & I N V E S T I G AT I O N S • E C O N O M I C S • F I N A N C I A L A D V I S O RY • M A N A G E M E N T C O N S U LT I N G
Table of Contents
Section 1 »
The Market Landscape
Section 2 »
FDRs and Compliance Requirements
Section 3 »
Current Oversight (including FDRs)
Section 4 »
FDR Oversight Tool Kit
The Market Landscape
Changes in Prescription Drug Spend
» Prescription drug spend is growing and it is becoming a
larger part of overall healthcare spend.
›
U.S. spending on prescription medicines jumped 13 percent to $374
billion in 2014*.
›
According to research done by Kaiser Family Foundation, spending
on Part D benefits is projected to rise from 12.7% [2006-2014] to
16.8% [2014-2024] of total Medicare spending (net of offsetting
receipts)**.
* http://www.reuters.com/article/2015/04/14/us-health-spending-medicine-idUSKBN0N508I20150414
** http://kff.org/medicare/fact-sheet/the-medicare-prescription-drug-benefit-fact-sheet/
What’s Happening in Part D
With 2014 drug spend showing an increase unseen since 2001 and Part
D becoming a larger percentage of healthcare spend, program noncompliance and fraud, waste and abuse are becoming the focus for CMS,
DOJ and OIG activities.
» HHS' Office of Inspector General released two reports in June 2015 shining a light on
questionable billing patterns in Part D and urging CMS to do more to protect the
program.
» One report found more than 1,400 pharmacies had questionable billings for opioid
drugs, and a number of cities had higher than average billings for certain medications
last year.
» In June 2015 charges were filed against 44 people across the country for Medicare
Part D fraud—the first large-scale federal effort to focus on Part D fraud.
OIG Recommendations
An OIG report from June 2015 recommends CMS should:
1. Require plan sponsors to report all potential fraud and abuse to CMS and/or the MEDIC;
2. Require plan sponsors to report data on the inquiries and corrective actions they take in
response to fraud and abuse;
3. Expand drug utilization review programs to include additional drugs susceptible to
fraud, waste, and abuse;
4. Implement an edit to reject prescriptions written by excluded providers;
5. Exclude Schedule II drug refills when calculating final payments to plan sponsors at the
end of each year;
6. Seek authority to restrict certain beneficiaries to a limited number of pharmacies or
prescribers;
7. Develop and implement a mechanism to recover payments from plan sponsors when law
enforcement agencies do not accept case referrals;
8. Determine the effectiveness of plan sponsors' fraud and abuse detection programs; and
9. Ensure that plan sponsors' compliance plans address all regulatory requirements and CMS
guidance.
OEI-03-15-00180 ENSURING THE INTEGRITY OF MEDICARE PART D
FDRs and Compliance
Requirements
FDRs and Compliance Requirements
» Most Medicare plan sponsors utilize vendors (FDRs) to
satisfy some, if not most of the administrative requirements
of their Part D program.
» Plan sponsors must know their FDRs and proactively
monitor their FDRs' performance to ensure program
compliance.
» The sponsor maintains the ultimate responsibility for fulfilling the terms and
conditions of its contract with CMS, and for meeting the Medicare program
requirements.
Stakeholder Relationship Flow Chart
* Prescription Drug Benefit Manual Chapter 9 -Compliance Program Guidelines and
Medicare Managed Care Manual Chapter 21 – Compliance Program Guidelines
Current Oversight (including
FDRs)
Current Oversight (including FDRs)
» Program Audits
» RAC Audits
» OCR Audits
» CTM
» HPMS Reporting
CMS Program Audit
» Audit Areas
› ODAG
› CDAG
› Formulary & Benefit Administration
› Compliance Program Effectiveness
› SNP MOC
» New Audit Cycle
» New universe layouts and the "3 strike" rule
» Aggravating Circumstances
Medicare Recovery Audit Contractor Program - RAC
» What is the RAC Auditing?
›
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Duplicate Payments
DIR
Excluded Providers 2008 - 2011
Unauthorized Prescriber 2009 – 2012
DEA Schedule Refill Errors 2010 - 2011
OCR Audits
» Phase II will focus on both covered entities and business
»
»
associates.
Phase II will begin in early 2016
The audit protocol covers:
›
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Privacy Rule requirements;
Security Rule requirements for administrative, physical, and
technical safeguards;
Requirements for the Breach Notification Rule.
http://www.hhs.gov/ocr/privacy/hipaa/enforcement/audit/protocol.html
Complaint Tracking Module (CTM)
»Benefits/Access
»Confidentiality/Privacy
»Contractor/Partner Performance
»Customer Service
»Enrollment/Disenrollment
»Exceptions/Appeals
»Formulary
»Grievances
»Marketing
»Medication Therapy Management
»Plan Administration
»Pricing/Co-Insurance/ Premiums
»FWA
»Quality of Care
»Implementation
»Pharmacies
HPMS Reporting
»Enrollment and Disenrollment
»Retail, Home Infusion, and Long-Term Care Pharmacy Access
»Medication Therapy Management Programs
»Prompt Payment by Part D Sponsors
»Grievances
»Coverage Determinations and Redeterminations
»Long-Term Care (LTC) Utilization
»Fraud, Waste and Abuse Compliance Programs
»Employer/Union-Sponsored Group Health Plan Sponsors
»Plan Oversight of Agents
Regulatory Changes
» A Regulatory change in May 2014 by the Centers
for Medicare & Medicaid Services Establish
Authority To Directly Request Information From
First Tier, Downstream, and Related Entities (§
422.504(i)(2)(i), and § 423.505(i)(2)(i))
FDR Oversight Tool Kit
Tools for FDR Oversight
1. Organize
2. Negotiate
3. Communicate
4. Practice
5. Repurpose
Tools for FDR Oversight
Organize
»
Identify all oversight activities / requirements
»
Identify all FDRs
»
Identify which program requirements impact which vendors
»
Maintain vendor contracts
»
Keep record of contractual or service changes
»
Keep record of system / configuration changes
»
Maintain copies of internal or external vendor oversight
activities
PBM / FDR Relationship Flow Chart
PBM
Claim Processor
Rebate
administration
Call Center
Pharmacies
Mail Fulfillment
Scanning
Imaging
Data Storage /
Disaster
Recovery
Clinical / Case
Management
Premium Billing
/ Collections
Examples of functions that relate to the sponsor’s
Medicare Parts C and D contracts
»
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»
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»
»
»
»
»
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Sales and marketing;
Utilization management;
Quality improvement;
Applications processing;
Enrollment, disenrollment, membership
functions;
Claims administration, processing and
coverage adjudication;
Appeals and grievances;
Licensing and credentialing;
Pharmacy benefit management;
Hotline operations;
Customer service;
Bid preparation;
Outbound enrollment verification;
»
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Provider network management;
Processing of pharmacy claims at the
point of sale;
Negotiation with prescription drug
manufacturers and others for rebates,
discounts or other price concessions on
prescription drugs;
Administration and tracking of enrollees’
drug benefits, including TrOOP balance
processing;
Coordination with other benefit programs
such as Medicaid, state pharmaceutical
assistance or other insurance programs;
Entities that generate claims data; and
Health care services.
Tools for FDR Oversight
Negotiate
»
Make sure your contract is adequate to clearly define
services and requirements of both parties.
» Consider the following:
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Well defined services, schedules and data exchanges
Audit rights & support
Employee requirements
Internal / third-party audits
Data use / storage / disaster recovery
Cybersecurity
SLAs with regular management, reporting and remediation
Tools for FDR Oversight
Communicate
»
Need to establish ways to facilitate and document
information exchanges between the plan sponsor and
FDRs
»
Regular calls to discuss daily operations / issues
»
Off-hours contacts
»
»
Training
Disclosure protocol for:
› Compliance issues
› HIPAA breeches
› FWA issues
Tools for FDR Oversight
Practice
»
»
»
Perform “mock” audits
› Require regular data universe pulls
› Perform tracer samples
Use the CMS provided tools for self assessment
› CMS Readiness Check List
Require disaster recovery tests (inclusive of data exchanges to client
and govt. as applicable)
» Consider ethical hacking exercises
» Use identified issues as training exercises
Tools for FDR Oversight
Repurpose
»
Find ways to re-use operational data for audit / oversight
purposes
› Program audit universes
› HPMS reporting data
› DIR reporting
› Coverage gap
› Claims rejects
› CTM data
Questions
Contact:
Erin Costell
Director, Navigant Consulting
[email protected]
314-239-1542